G.R. No.

L-10076 October 28, 1915

THE CITY OF MANILA, Plaintiff-Appellant, vs. FERNANDA FELISA CORRALES, ET

AL., Defendants-Appellants.

Assistant City Attorney Moreno Lacalle for plaintiff.

Thos. D. Aitken for defendants.

JOHNSON, J.:

The present action was commenced on the 22nd of May, 1913, in the Court of First Instance of the
City of Manila. It was brought for the purpose of condemning certain property under the power of
eminent domain. The complaint alleged that the property in question was necessary for the purpose
of opening or building a street running from Calle Marques de Comillas to Calle Nozaleda, crossing
Calle San Marcelino and Taft Avenue. The plaintiff was able to purchase much of the land necessary
for said construction. The property involved in the present action is represented by the following
plan:

chanrobles virtual law library

The question of the necessity for said condemnation was submitted to the court. After hearing the
respective parties it was agreed that the opening or construction of said proposed street was
necessary. Whereupon, by agreement of all the parties, Mauro Prieto, Alfonso Tiaoqui, and Denis J.
Mahoney were appointed as commissioners to view and appraise the property involved in the
present action and to report their findings and conclusions to the court. said commissioners were
duly sworn and entered upon the performance of their duty. They held many sessions and heard all
of the witnesses which the respective parties desired to
present.chanroblesvirtualawlibrary chanrobles virtual law library

After hearing all of the proofs presented relating to the value of the property involved, said
commissioners unanimously agree upon and made the following report:

By virtue of an order issued by the Honorable A.S. Crossfield, judge Court of First Instance, under
date of September 1, 1913, the undersigned, Mauro Prieto, Alfonso Tiaoqui and Denis J. Mahoney
were appointed commissioners to hear the parties, view the premises and assess the damages to
be paid for the condemnation of the properties required to be expropriated in the above-entitled
case.chanroblesvirtualawlibrary chanrobles virtual law library

The commissioners, after having duly qualified and after having duly notified all the parties
concerned, inspected the premises to be expropriated on September 13, 1913, and on the same
date and on various subsequent dates held various sessions at which evidence, oral and
documentary, relative to the property of Fernanda F. Corrales and children was offered and
received. A complete report of the proceedings is submitted
herewith.chanroblesvirtualawlibrary chanrobles virtual law library

After all the evidence obtainable had been submitted by the litigants, the commissioners, after a
careful analytical study of the evidence, decided to make the following appraisement and
assessment of damages for the premises to be expropriated belonging to Fernanda F. Corrales and
children. The land sought to be expropriated, parcel No. 2, Exhibit A hereto attached, was found to
be considerably lower than the present level of Calle Marques de Comillas and lower than level of
the proposed boulevard:

For parcel No. 2, city engineer's plan F-10-

161 F, hereto attached and marked Exhibit
A, having an area of 1,837.20 sq. m., after
deducting cost of fill required to bring to
normal street level P9,284.15
This sum is arrived at by the following calculations:
30 meters deep, Calle P3,870.08
M. de Comillas, 483.76
sq. m., @ P8.00
Interior area, 1,353.44
sq. m., @ P5.00 6,767.20

Total, 1,837.20 sq. m. 10,637.28

Deduct cost of fill,
1,082.5 cubic meters, @
P1.25 1,353.13
Net value of land,
present condition 9,284.15
For the tienda indicated as building No. 2 on
city engineer's plan above quoted 2,000.00
For damages to residence, building No. 1
Exhibit A, and for cost of necessary
rearrangement consequent on appropriation 8,105.00
For the litografia, building No. 3 Exhibit A 7,920.00
For cost of removing machinery from present
site and reinstalling on another location 2,100.00
For stable or camarin known as building No.
4 376.00
For damages incident to the stoppage of
business for a period of three months, more
or less 2,000.00

Total 31,785.15

In reviewing the testimony of the various witnesses, that of Sellner was taken as being the most
reasonable and logical with regard to the value of the land, and the uncontradicted testimony of
Latimer was used as a basis on which the estimated cost of fill to be deducted was considered and
determined. With regard to the main building marked No. 1, Exhibit A, and the stable marked
building No. 4, the evidence of Perez Muñoz and George B. Asp were considered jointly. Asp's
testimony was taken as the basis for the value placed on the litografia, building No. 3, Exhibit A, and
the certificate of the city assessor and collector taken for the value placed on the tienda marked
building No. 2 thereon. The item of P2,100 for removing and reinstalling the machinery was agreed
on between the parties in litigation and the sum of P2,000 recommended to and awarded for the
stoppage of business was based on the testimony of E.C.
McCullough.chanroblesvirtualawlibrary chanrobles virtual law library

It will be noted that the actual figures given in Latimer's testimony as the cost of filing were P1.65,
but the undersigned believe that this price is excessive and have therefore recommended a
deduction of only P1.25 per cubic meter to be allowed.chanroblesvirtualawlibrary chanrobles virtual
law library

Respectfully submitted.

(Signed) M. PRIETO
A. TIAOQUI.
DENIS J. MAHONEY.

Upon a consideration of the report of said commissioners, the Honorable A.S. Crossfield, judge,
accepted their findings of fact and conclusions and rendered a judgment in favor of the defendants
and against the plaintiff in accordance with their
recommendations.chanroblesvirtualawlibrary chanrobles virtual law library
From that judgment, both the plaintiff and the defendants appealed to this court and each made
several assignments of error. For the purpose of convenience in discussing the questions presented
by the respective appellants, their assignments of error are hereby presented in parallel columns:
ASSIGNMENTS OF ERROR BY
DEFENDANT-APPELLANTS.
First. The trial court erred in not awarding the
defendants at least P13,617.63, as the value
of the land expropriated.
Second. The trial court erred in accepting the
commissioners' valuation of the tienda
(building No. 2 on plan) and in not fixing its
valuation at at least P5,265.
Third. The trial court erred in not awarding
the defendants at least P5,048.40, as
damages on building No. 1 on plan.
Fourth. The trial court erred in not awarding
the defendants at least P16,362, as the value
of the lithograph building No. 3 on plan.
Fifth. The trial court erred in not awarding the
defendants at least P849.36 for
the camarin or stable, No. 4 on plan.
Sixth. The trial court erred in not awarding
defendants at least P1,000 for trees, plants
and tennis-court.
Seventh. The trial court erred in not allowing
the consequential damages to the land not
taken.
ASSIGNEMENTS OF ERROR BY
PLAINTIFF-APPELLANT.
First. The trial court erred in accepting the
valuation of P9,284.15, assessed by the
commissioners, as the present net market
value of the land sought to be condemned,
and in overruling plaintiff's motion to reduce
said valuation by P433, the amount arbitrarily
deducted by the commissioners from the cost
of filing, as established by the defendants.
Fourth. In accepting the sum of P2,000
assessed by the commissioners as the value
of the structure known as building No. 2, and
it not reducing said valuation to the sum of
P1,680.
Second. In accepting the sum of P8,105 as
assessed by the commissioners as the value
of the protion to be taken from the structure
described as "No. 1 main building," in Exhibit
A, and for cost of work of reconstruction and
damages to remainder of building, and in not
finding that the owners are only entitled to
receive for this item the sum of P5,444.50,
and no more.
Fifth. In allowing the sum of 2,000 assessed
by the commisioners as damages to the
defendants, and in overruling plaintiff's
motion to reject said assessment.
Third. In accepting the sum of P376
assessed by the commissioners as the value
of the structure described as "building No. 4"
and in not finding that the total compensation
which the owners are entitled to receive for
said structure is the sum of P200 and no
more.
Sixth. In not finding that the sum of
P5,566.44, which is the consequential gain in
value which the remainder of the property of
defendants will obtain through the
construction of the public improvement
referred to in these proceedings, should be
 deducted from the compensation to be paid
to the owners.

In taking private property for public use under the power of eminent domain, the persons whose
property is thus taken, should be paid the reasonable market price of their property. The owners of
property should not take advantage of the necessity of the public for the purpose of requiring the
Government to pay more than their property is worth, neither should the Government be permitted to
take the property of private persons at a less price than it is reasonably worth at the time of the
expropriation. When we speak of the market value of property taken under the power of eminent
domain, we mean the value which purchasers generally would pay for it. We do not mean what a
purchaser would pay who had no particular object in view in purchasing, and no definite plan as to
the use to which to put it. The owner has a right to its value for the use for which it would bring the
most in the market. (King vs. Minneapolis Union railway Co., 32 Minn., 224.)chanrobles virtual law
library

With this principle in mind we shall proceed to examine into the report of the commission for the
purpose of ascertaining whether or not their conclusions conform therewith. The first assignment of
error by each of the appellants relates to the amount allowed for all of the land belonging to the
defendants, appropriated for the opening or construction of the street. It is admitted by both parties
that the amount of land appropriated is 1,837.20 square meters. (See parcel No. 2 of plan.) The
commissioners allowed as the reasonable value of said land the sum of P9,284.15, said sum being,
in their judgment, the reasonable and just market value of said land. The commissioners, for the
purpose of ascertaining the value of said parcel No. 2, divided it into two parts, the first consisting of
483.76 square meters at P8 per meter, and the second consisting of 1,353.44 square meters at P5
per meter. On that basis, the value of the land (1,837.20 square meters) amounted to P10,637.28.
The commissioners, however, reduced said total amount by the sum of P1,353.13, which was the
necessary cost, in their estimation, to properly grade the street. Deducting from the total value of the
land (P10,637.28) the cost of grading the street (1,353.13), we have what the commissioners
regarded as the value of the land, or the sum of P9,284.15. The defendant-appellants insist that they
should have been allowed the sum of P13,617.63. In support of their claim they cite the declaration
of several of the witnesses who testified during the trial of the cause with reference to the value of
the land in question. Sellner testified that a portion of the land was worth P8 per meter and the other
portion P5 per meter. B.A. Green testified that the first portion or parcel was worth P8 per meter and
the other portion from P4.50 to P5 per meter. Serrano testified that one portion of the land was worth
P10 per meter and the balance P7 per meter. Enrique Brias testified that one portion was worth P8
per meter and the other P5 per meter. Da. Felisa Corrales testified that all of the land in question
was worth on an average of P10 per meter.chanroblesvirtualawlibrary chanrobles virtual law library

It will be seen from the declarations of these witnesses that Sellner, Green, and Brias practically
agreed as to the value of the land. The defendant-appellants, however, attempt to show that some of
the witnesses were perhaps interested and that therefore their testimony should be to some extent
discredited. Eliminating the declarations of the witnesses for the plaintiff whose testimony it is
claimed is more or less prejudiced, and eliminating the declaration of one of the defendants for the
same reason, we would then have left the declaration of Green and Brias, who practically agree as
to the value of the land, against the testimony of Serrano. While we do not pretend that the
preponderance of evidence can always be measured by the number of witnesses, yet, nevertheless,
in the present case, it would seem that by every rule of evidence, the preponderance is in favor of
the conclusions of the commissioners, that one portion of the land in question is worth P8 and the
other portion P5 per meter.chanroblesvirtualawlibrary chanrobles virtual law library

By reference to the report of the commissioners, it will be seen that they reduced the total value of
the land, P10,637.28, by the sum of P1,353.13, the amount which was necessary to grade the street
when opened. The commissioners found that it would cost P1.25 per cubic meter to properly grade
the street. The plaintiff-appellant complains that they should have reduced the total amount by the
sum of P1,353.13 plus P433 or the sum of P1,786.13. The only expert evidence adduced during the
trial of the cause, which stands uncontradicted and undisputed, was the testimony of Latimer who
stated that it would cost P1.65 per cubic meter to properly fill the street. Sellner testified that while
the total value of the land was P10,637.28, that amount should be reduced by whatever it would cost
to fill and grade the street. He does not state, however, the amount which it would cost to properly
grade the street. The plaintiff-appellant argues that the commissioners arbitrarily, without any proof
whatever, reduced the cost of filling the street and grading the land from P1.65 to P1.25 per square
meter.chanroblesvirtualawlibrary chanrobles virtual law library
It will be remembered that none of the witnesses, except Sellner, in estimating the value of the land
in question, made any reduction whatever for the cost of grading the street when opened. It is
difficult to understand upon what theory the plaintiff could insist upon having the actual value of the
land at the time of expropriation reduced by what it would cost to grade the street after the land had
been turned over to it. The plaintiff was attempting to expropriate the land in the condition under
which it was found. The commissioners were appointed for the purpose of ascertaining its value in
that condition. The question was as to the value then, not its value after it was appropriated for
public street purposes. It is difficult to understand upon what theory the plaintiff could require the
defendants to bear the cost of the construction of the proposed street. In fact, a condition might be
imagined where the street might be so graded as to result in actual damaged to the rest of the
property of the defendants. For example, if the city should establish a grade much higher than the
property belonging to the defendants, actual damages might result to the defendants by virtue of the
grading of the street. We do not believe that the cost of grading the proposed street should be
charged to the defendants. We are of the opinion, therefore, and so hold, that the value of the
property, P10,637.28, should not have been reduced by the sum of P1,353.13, or by any other sum,
for the purpose of paying for the grading of the proposed street. In our opinion, a preponderance of
the evidence clearly shows that the land (parcel No. 2) is reasonably worth
P10,637.28.chanroblesvirtualawlibrary chanrobles virtual law library

The second assignment of error of the defendant-appellants and the fourth of the plaintiff-appellant
relates to the amount which the commissioners allowed for the tienda located on the land in question
which is marked building No. 2 on the plan. The defendant-appellants assert that the commissioners
did not allow sufficient for said tienda. The plaintiff-appellant contends that the commissioners
allowed too much as the value of the tienda. The defendant-appellants alleged that the
commissioners should have allowed the sum of P5,265. The plaintiff-appellant attempts to show that
the tienda was not worth more than P1,680. The commissioners allowed P2,000. By reference to the
plan above, it will be seen that the tienda at the point marked No. 2 is located wholly upon the land in
question. The opening of the street made it necessary to completely remove said tienda. The
defendant-appellants show that they were receiving a monthly rent for said building in the sum of
P50. That proof is not denied. The plaintiff-appellant insists, and presented proof in support of the
contention, that the tienda could be reconstructed for the sum of P1,680. The plaintiff insists that the
defendants should not receive more for the tienda than the cost of its construction, while the
defendants insist that they should be allowed a sum which would produce P50 per month, at the
current rate of interest. In other words, the defendant-appellants insist that if 6 per cent is the current
rate of interest, for example, they should be allowed a sum for said tienda sufficient to produce P50
per month. Using this example as the basis of the defendants' contention, they should be allowed
the sum of P10,000. Changing the basis of our calculations, and assuming that the current rate of
interest is 10 per cent, then, upon that basis, under the theory of the defendants, they should receive
the sum of 6,000 for said tienda.chanroblesvirtualawlibrary chanrobles virtual law library

One of the witnesses testified that property should be rented so as to render an income of 12 per
cent on its value. Another witness testified that property should be rented so as to produce an
income of 10 per cent. The defendant-appellants claim that under that testimony they should receive
an amount for said tienda which, at 11 per cent, would produce an income of P50 per month, or the
sum of P5,454. In support of their contention, the defendant-appellants cite several cases, the most
important of which are the G.R. & I. R.R. Co. vs. Weiden (70 Mich., 390), and the Union Railway
Company vs. Hunton (114 Tenn., 609).chanroblesvirtualawlibrary chanrobles virtual law library

The question of the value of property in expropriation proceedings is always a difficult one to settle.
The opinions of men vary so much concerning the real value of property that the best the courts can
do is to hear all of the witnesses which the respective parties desire to present, and then, by
carefully weighing that testimony, arrive at a conclusion which is just and equitable. We do not
believe that the contention of the defendant-appellants is tenable. There may be cases where the
value of property can be fixed upon its actual rental value. For example, where the property has
been rented for a number of years at a fixed rate, then such rate ought to be used as the basis of the
actual value of the property. It must not be overlooked that there is a difference between the actual
rental value of the property and the price for which it is rented at any particular time. What property
will rent for is a variable quantity. The amount paid for the use of property is not always a constant
quantity. The amount which the tenant will pay may depend upon his particular necessities at the
time. The theory of the defendants would fix the rent for all time as a constant quantity. The constant
changing of centers of population and of business, as well as the fluctuation of business, depending
upon good or so-called hard times, affect that value of property for rental purposes. For example,
had property been expropriated upon the Escolta in the city of Manila early in the year 1898, and
had its value been capitalized upon the basis of its rental value then, the owner would have received
a much less amount for his property than if the same property had been expropriated in the year
1906, the difference depending upon what the particular property rented for in the two periods. Thus,
within a period of seven or eight years, an absolute readjustment of the value of the properties had
taken place. Thus it will be seen that the contention of the defendants that the rental value of the
property should be fixed for all time by what happens to be its rental value at the time of the
expropriation would seem to be untenable.chanroblesvirtualawlibrary chanrobles virtual law library

Neither can the rental value be determined upon a consideration of the cost of the construction of
the property. For example, a building in the principal part of the city might be worth much more than
one on the outskirts, which cost twice as much. A building on the Escolta, in the city of Manila, which
cost P50,000 might rent for twice as much as a building on the outskirts of the city which cost
P100,000. Thus it is clear that the cost of construction cannot be used as a basis for determining the
value of property.chanroblesvirtualawlibrary chanrobles virtual law library

In determining the value of land appropriated for public purposes, the same considerations are to be
regarded as in a sale of property between private parties. The inquiry, in such cases, must be what
is the property worth in the market, viewed not merely with reference to the uses to which it is at the
time applied, but with reference to the uses to which it is plainly adapted, that is to say, What is it
worth from its availability for valuable uses?chanrobles virtual law library

So many and varied are the circumstances to be taken into account in determining the value of
property condemned for public purposes, that it is practically impossible to formulate a rule to govern
its appraisement in all cases. Exceptional circumstances will modify the most carefully guarded rule,
but, as a general thing, we should say that the compensation of the owner is to be estimated by
reference to the use for which the property is suitable, having regard to the existing business or
wants of the community, or such as may be reasonably expected in the immediate future. (Miss. and
Rum River Boom Co. vs. Patterson, 98 U.S., 403).chanroblesvirtualawlibrary chanrobles virtual law
library

The tienda in question (building No. 2), according to the proof, is a very cheap structure, and might
be reconstructed for the sum of P1,680. Its value, as insisted upon by the defendant-appellants,
does not include the land. It does not seem reasonable to believe that such a structure, even
granting that it rents for P50 a month, has a market value such as is contended for by the
defendants, under normal conditions, where the owner desires to sell, without necessity, and to a
person who desires to buy for some specified purpose.

Again referring to the contention of the defendant-appellants that they should receive for said tienda
a sum which, at 11 per cent, would produce an income of P50 per month, we desire to make the
following observations.chanroblesvirtualawlibrary chanrobles virtual law library

Upon the land expropriated there were three buildings, which the defendants rented: (a) A tienda
which rented for P50; (b) a lithographing establishment which rented for P150 per month; and (c) a
stable which rented for P10 per month.chanroblesvirtualawlibrary chanrobles virtual law library

The amount received by the defendants for these three buildings was P210 per month. Of course, in
considering said buildings, some consideration must be given to the land which they occupy.
Assuming that the defendants desired to sell said parcel No. 2, the land in question, in endeavoring
to ascertain what the land and buildings in question are worth, upon their theory, then they would
capitalize said buildings and land at an amount which, at 11 per cent, would produce P210 per
month. Upon that basis, the land and buildings would be worth a little more than P22,909. Taking the
amount which the commissioners allowed the defendants, P31,785.15, and reducing that sum by the
sum which the commissioners allowed for damages done to the residence, P8,105, we have the
sum of P23,680, which the commissioners allowed for the land and buildings, which is P771,15 more
than the defendants were entitled to upon their own theory. Of course, this conclusion is reached
upon the theory of the defendants, to wit, that the value of their land is an amount which, at 11 per
cent, would produce the present income of P210.chanroblesvirtualawlibrary chanrobles virtual law
library

It must be remembered, by reference to the above, that we have added to the value of the land, the
sum of P1,353.13, which the commissioners reduced, an account of the cost of grading the street. If
that sum, P1,353.13, is added to the P771.15 above, we have the sum of P2,124.28, more than the
defendants claim they are entitled to upon their own theory. This argument is not presented here for
the purpose of indicating our acceptance of the theory of the defendants, but simply for the purpose
of demonstrating that, even upon their own theory, they are receiving more for their property than
they would under their own contention.chanroblesvirtualawlibrary chanrobles virtual law library

With reference to the other assignments of error, relating to the various items which the
commissioners allowed, and considering the evidence adduced during the hearing, and in view of
what has been said above, and without a further discussion of the evidence relating to said
assignments of error, we are of the opinion, and so hold, that with the modification above indicated,
relating to the cost of grading the street, the judgment of the lower court should be affirmed, with
costs.chanroblesvirtualawlibrary chanrobles virtual law library

It is therefore hereby ordered and decreed that a judgment be entered in favor of the defendants and
against the plaintiff in the sum of P33,138.28, with costs. So ordered.